7/01/2005

Homeowners Making Way for Government Bulldozers: Reason Public Policy Institute, 6/27/05

The Supreme Court decides property rights aren't rights after all

By Samuel R. Staley

You may think your home is your castle, but the Supreme Court decided it is just on loan from your friendly local government. The government can now bulldoze your home anytime it wants as long as the legally-required number of public hearings are held and politicians have some semblance of a plan for economic development on your land.

That's what any reasonable person reviewing the Supreme Court's recent decision in Kelo v. New London might think. Hundreds of local governments already take private property. The Supreme Court's ruling in the Kelo eminent domain case just gave them the rubber stamp they wanted.

Kelo involves a hardy band of home and business owners in the historic neighborhood of Fort Trumbull in New London, Connecticut. The city, acting through its redevelopment arm, condemned the homes and businesses to make way for new professional office buildings, swanky retail shops, luxury condos and apartments.

The city's "vision" for the neighborhood, local officials hope, will generate more tax revenue. The newer buildings, bigger tax base, and more revenue constituted a "public use" in their eyes - and the Supreme Court agreed.

Eminent domain is not a new government power. It's been around for centuries and is enshrined in the Fifth Amendment to the U.S. Constitution. What's new is the brazenness in which governments use it. Eminent domain is supposed to help governments when they need to provide a public use. In the past, building roads, acquiring land for schools and public buildings, constructing bridges and canals, or providing parks qualified.

In the mid-1980s, that changed when the Michigan Supreme Court allowed the City of Detroit to demolish a close-knit, working class neighborhood called Poletown to make way for a factory. The city condemned the properties, bulldozed the homes, and handed the land over to General Motors to build its plant.

The Michigan Supreme Court reversed its decision in 2004, but the damage was done. The decision unleashed a wave of condemnations, like New London's, that shoved long-time residents and businesses aside in the name of economic development.

"Promoting economic development is a traditional and long accepted function of government," Justice John Paul Stevens wrote in the Court's majority opinion on Kelo.

The Court says public use can now basically be interpreted as any function of government. Indeed, this is exactly what Justice Sandra Day O'Connor fears. "Today nearly all real property is susceptible to condemnation on the court's theory," Justice Sandra Day O'Connor wrote in her strongly-worded opposition to the ruling. "The specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."

Sound extreme? Consider the words of New London's lead attorney during oral arguments in the case:

Justice O'Connor asked if the city could condemn a Motel 6 and hand the land over to a Ritz-Carlton if the city thought the move would generate more tax revenue.

Wesley Horton, New London's attorney, replied, "Yes, Your Honor. That would be okay."

"So you can always take from A and give to B if B pays more taxes?" asked Justice Antonin Scalia.

"If they are significantly more taxes," said Horton.

A shopping mall or business complex will almost always generate significantly more tax revenue than private homes, meaning we are all at risk.

Sad is it may be, many people ignored eminent domain in the past because it seemed to apply mainly to the poor—removing so-called "urban blight". The poor have always been at a disadvantage because they were renters or couldn't afford attorneys to fight city hall. Now, eminent domain is removing the middle class. Only the rich may be safe from the government bulldozers.

Private property rights were once a hedge against government corruption and abuse. This protection was so essential the Founding Fathers explicitly limited its use to special circumstances - public uses only - and required "just compensation" be provided to homeowners.

Now, there appears to be few "rights" left in private property rights. The U.S. Supreme Court just told every city, county, and state government that they can go after your home to increase revenues. The Court even put it in writing.

Dr Samuel R. Staley (sam.staley@reason.org) is Director of Urban and Land Use Policy at Reason Foundation and co-editor of the book Smarter Growth: Market-Based Strategies for Land-Use Planning in the 21st Century (Greenwood Press). He is also the author of the report "Study: Eminent Domain, Private Property and Redevelopment"  available online at:www.rppi.org/ps331polsum.pdf.

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